A booking advance is a part-payment you make to hold a plot while the rest of the purchase is worked out. Before you pay it, verify the layout and the seller, ask for the title documents, pay in a traceable way, and get the plot number, price, schedule and refund terms in writing. A small amount paid in a hurry can still be hard to recover.
Most guides on plot buying stop at documents. This one covers the money step that many buyers rush: what you are actually paying for, what to check first, and what a fair set of written terms looks like.
What a booking advance actually is
Buyers call it token money, booking amount, advance or earnest money. The names vary. In practice, it is a payment that signals serious intent and, in return, the seller agrees to hold a specific plot for you for a period while you complete checks and arrange the balance.
Three things are worth keeping straight:
- It is not the sale. Ownership passes through a registered sale deed, not through a receipt. An agreement of sale and a sale deed are separate stages, so ask your advocate which one you are being asked to sign.
- It is not automatically refundable or non-refundable. That depends on what both sides agreed in writing. Silence on the point is the worst outcome, because you will be arguing about it later.
- It is not a substitute for verification. Paying first and checking later reverses the safe order. Our pre-token verification sequence is built around doing the checks before money changes hands.
The size of the advance is a commercial matter between you and the seller. We are not quoting a standard percentage here, because there is no single figure you can safely assume. If a number is put to you, ask what it is based on and have it written down with the rest of the terms.
Step 1: Verify before you pay
Do these checks first, in this order. None of them needs the seller’s permission, and none should feel awkward to ask about.
The layout approval. Ask for the layout permit number and look it up yourself on Telangana’s BuildNow portal: buildnow.telangana.gov.in, then Citizen Search. Do not rely on a number printed in a brochure or a screenshot sent over chat. If you need help reading the number, see our guide to reading an HMDA LP number.
RERA, where it applies. Not every project is registered with the Telangana Real Estate Regulatory Authority. If the seller quotes a TG-RERA registration number, check it on rera.telangana.gov.in and confirm that the project name and promoter match. If no registration is quoted, ask why, and confirm in writing whether the project falls within RERA’s scope. Our walk-through, how to verify HMDA and RERA for a Bibinagar plot, shows the steps.
The title documents. Ask for copies of the documents that show how the seller came to own the land, and have an advocate read them. A layout permit tells you the layout was permitted. It does not by itself prove the seller’s title; our piece on approval versus title explains the difference.
The seller’s identity. Confirm who you are paying: the registered owner, the developer company, or an agent or channel partner. The name on the receipt and the name on the title documents should connect clearly. If they do not, ask for the authority document that links them.
Step 2: Choose a traceable payment mode
The mode you pay in decides how easily you can later prove you paid.
- Prefer bank transfer or cheque to an account in the name of the seller or developer company named in the written terms. This leaves a record on both sides.
- Be cautious about cash. A cash payment leaves only the paper the seller chooses to give you. If a seller insists on cash, or on a transfer to an individual’s personal account that is not the seller, treat it as a reason to slow down and ask why.
- Keep the proof together. Save the bank confirmation, the cheque copy or the payment screenshot alongside the receipt, and note the date and reference number.
- Pay what you agreed, to the party you agreed. Do not top up the amount or add a second payment on a verbal promise.
For tax or reporting questions linked to how you pay, ask a chartered accountant. We are not giving tax advice here, and the rules around payment modes are for a professional to explain for your case.
Step 3: Get a proper receipt
A WhatsApp message saying “received” is not a receipt. Ask for a written, dated receipt that you can later show to a bank, an advocate or the regulator.
| What the receipt should show | Why it matters |
|---|---|
| Date of payment | Starts the clock on any time limits in the terms |
| Your full name | Links the payment to you, not to a “customer” |
| Seller or developer name | Shows who accepted the money |
| Amount, in figures and words | Avoids disputes over the sum |
| Payment mode and reference | Ties the receipt to the bank record |
| Layout name and plot number | Shows which plot is being held |
| Purpose: “booking advance” for that plot | Separates it from other payments |
| Signature and, where available, company seal | Shows it was accepted by someone authorised |
If the receipt is generic, for example “received ₹ for plot”, ask for it to be reissued with the plot number and purpose. A receipt that does not identify the plot is hard to use as evidence of anything.
Step 4: Get the terms in writing
This is the step most often skipped, and the one that matters most if the deal does not go ahead. Ask for a short written booking letter or agreement, and read it before you pay. It should cover the following points.
The plot and the price
- The layout name and the exact plot number, not “a plot in the east block”.
- The plot’s size and facing as stated in the sanctioned layout, with the seller confirming it matches the layout drawing.
- The agreed price basis and the total, written plainly. If any charges are extra, such as development, maintenance, club or corpus charges, list them by name and say whether they are included.
The payment schedule
- The balance amount and when each instalment falls due.
- The date or event by which the sale agreement and, later, the registration are expected.
- What happens to the price if the schedule slips on either side.
The time limit on the booking
- How long the plot is held for you.
- What the seller may do if you do not complete within that period, and what happens to your advance.
Cancellation and refund
This is the clause to read twice. Ask the seller to write down:
- In what circumstances the advance is refunded in full, for example if title documents or approvals do not check out to your advocate’s satisfaction.
- In what circumstances any deduction is made, how it is calculated, and who decides.
- The time limit within which a refund will be paid after you ask, and the payment mode.
- What happens if the seller cancels, withdraws the plot or cannot complete the sale.
If the answers are vague, such as “we will see” or “it is non-refundable, everyone knows that”, ask for exactly that sentence in writing. If the seller will not put it on paper, you now know how the conversation would go in a dispute.
What the document does not promise
Read for words that quietly shift risk to you, such as clauses that let the seller change the plot, the layout or the price without your consent. Ask your advocate what each clause means for you.
Red flags at the booking stage
None of these proves bad faith on its own. Together, or when the answer to your question is evasive, they are a reason to pause.
- Pressure to pay today “because only a few plots are left”.
- No plot number, or a plot number that changes between conversations.
- Cash only, or payment requested to an unrelated personal account.
- A receipt without the seller’s name, plot number or purpose.
- Reluctance to share the layout permit number or title documents before payment.
- A refusal to put refund and cancellation terms in writing.
- Verbal promises about approvals, roads, amenities or timelines that do not appear in any document.
What this does NOT mean
Doing every step above does not guarantee a smooth purchase or recover your money in every case. This guide cannot tell you whether a particular seller’s title is sound, whether a specific clause is enforceable, or what a court or the regulator would decide in a dispute. It is general information, not legal, tax or investment advice. It also does not say that a booking advance is required at all: you can ask for the documents and terms first and decide afterwards.
What to ask your lawyer (or advocate)
Take the booking letter, the receipt format and the title documents to an advocate before you pay, and ask:
- Do the title documents support the seller’s right to sell this plot, and who else would need to sign?
- Does the booking letter commit me to buy, or does it only reserve the plot?
- In plain words, when would I get my advance back, and what could be deducted?
- Are the time limits and schedule realistic, and what happens if either side misses them?
- Does the booking letter match what the seller said verbally, and what is missing?
- Are there any clauses that let the seller change the plot, the price or the layout?
- Is the party receiving the money the right party to receive it?
- If the seller defaults, what are my practical options, and where would I file a complaint?
A one-page checklist to carry
Copy these into your notes before you pay.
Verify
- Layout permit number looked up on BuildNow (Citizen Search)
- RERA registration checked on the TG-RERA portal, or reason for none recorded in writing
- Title documents received and read by an advocate
- Seller’s identity and authority matched to the documents
Pay
- Traceable mode, to the named account
- Bank record saved with date and reference
- Amount and purpose confirmed in writing before payment
Receive
- Dated receipt with plot number, amount, mode and purpose
- Signature or company seal
- Booking letter with price, schedule, time limit, cancellation and refund terms
Pause if
- Plot number missing or changing
- Cash only or unrelated account
- Refund terms refused in writing
- Pressure to decide today
For the wider list of checks, see our seven-point plot verification checklist.
If you would like to see a Young India Housing project in person, or ask for a project’s document set before deciding anything, WhatsApp us at +91 6309-555-444 (https://wa.me/916309555444).